Howell v. Bowden, 16149

• Decision Date: 29 March 1963
• Docket Number: No. 16149,16149
• Citation: 368 S.W.2d 842
• Parties: Joe HOWELL, Appellant, v. A. F. BOWDEN, Appellee.
• Court: Texas Court of Appeals

Page 842

368 S.W.2d 842

Joe HOWELL, Appellant, v. A. F. BOWDEN, Appellee.

No. 16149.

Court of Civil Appeals of Texas, Dallas.

March 29, 1963.

Rehearing Denied June 14, 1963.

Chester A. Oehler, Dallas, for appellant.

Leake, Henry, Golden, Burrow & Potts, Dallas, for appellee.

DIXON, Chief Justice.

A. F. Bowden, plaintiff in the trial court sued appellant Joe Howell for accounting and settlement of a partnership; and for damages alleged to have resulted from appellant's breach of his fiduciary duties as a partner and trustee both before dissolution and thereafter during the winding up period.

A duly appointed receiver has paid the sum of $58,675.68 into the registry of the court, which sum represents the net proceeds of the sale of the tangible and physical assets of the partnership. The money awaits distribution following final judgment.

After a jury verdict judgment was entered in favor of appellee for the sum of $29,337.84, being one-half the amount paid into the court by the receiver; and for the further sum of $54,491.88, being an award as damages for wrongful termination of the partnership. The judgment provides that appellant's one-half of the money in the registry of the court shall be applied on the $54,491.88 leaving a balance of $25,154.04 principal on the judgment in favor of appellee.

FACTS

Appellant and appellee, formerly close friends, agreed in 1956 to form, and they did form, a partnership under the name Tex-O-Koma Sales Company to act as manufacturers' agents in selling electronics equipment. Each paid in $2,000.00 as his initial capital investment. Appellant devoted his full time to the business. Appellee was a jet pilot in the Air Force, so he devoted only part of his time to the business--during his leave time, after duty hours, etc. He was to share losses, but until he retired from the Air Force he was to receive only such part of the profits as appellant should allocate to him. After his retirement from the Air Force appellee was to devote his full time to the business and share equally in the profits.

In 1956 the business lost $795.11, which loss was shared equally by the partners.

In 1957 the business made a profit of $17,801.50, of which $16,199.06 was allocated to appellant and $1,602.44 to appellee. In 1958 the profits were $31,349.09, of which $27,849.09 was allocated to appellant and $3500.00 to appellee.

Appellee resigned from the Air Force and on January 1, 1959 began to devote his full time to the partnership business. The capital accounts were balanced as of the above date. In 1959 the profits were $49,879.44, which amount was divided equally by the partners.

The company bank account was in the name of both partners and their wives. Any one of the four had authority write checks. A certificate was filed in the Assumed Name Records of Dallas County. Texas showing that Tex-O-Koma was a partnership composed of appellant and appellee. Income tax returns for the company were filed in 1956, 1957, 1958 and 1959 showing the company to be a partnership.

In November or December 1959 dissension arose between the partners. On March 5, 1960 appellant withdrew $5,000.00. At the same time he caused a second set of books to prepared. On March 15, 1960 appellee, who had been in Albuquerque, New Mexico on business, came to the home office in Grand Prairie, Texas, to find the books and records gone, no monthly statement available for February and the bank account exhausted. Upon inquiry appellee was informed by appellant that the books were at the Internal Revenue Office. This was not true. A quarrel took place. Appellee made a buy or sell offer. Appellant made a counteroffer.

Appellant then changed the locks on the office, took sole control of the office, the telephone numbers, the address of the business and made representations that thenceforward Tex-O-Koma would be carried on by him as a sole ownership. He also negotiated new agreements from manufacturers in which he was to act as agent instead of the partnership. He organized a corporation known as Howell Sales Company which took over most of the assets of the partnership, including the telephone, office address, etc.

This suit was filed April 11, 1960. On May 11, 1960 a receiver was appointed by agreement of the parties. The receiver collected the assets, except a few accounts, paid the money into the registry of the court, and was discharged.

Among the fifteen numbered findings of the jury were these: (1) On or before January 1, 1959 the parties agreed that all net profits resulting from monies collected after January 1, 1959 should be divided equally; (2) appellant wrongfully terminated the business relationship between the parties; (3) appellee suffered damage as a direct and proximate result of such wrongful termination; (4) the damage was in the amount of $57,500.00; (9) appellant was not justified in changing the locks on the office of Tex-O-Koma Sales Company; and (10) appellee did not terminate the partnership on March 15, 1960.

Appellee filed a remittitur of $3,008.82, thereby reducting te judgment for damages to $54,491.88.

OPINION

We shall first consider appellant's tenth point on appeal is which he complains that (1) there is no jury finding that a partnership of the profits; and (3) no finding as to how of profits; and (3)no finding as to how much appellant was to receive.

We see no merit in this point. Appellee pled an equal partnership. Appellant did not plead a sworn denial of the partnership as required by Rule 93(f), Texas Rules of Civil Procedure. Therefore the partnership stands as admitted. Coulson v. Alvis Auto Rentals, Tex.Civ.App., 352 S.W.2d 849; Foster v. Pace Packing Co., Tex.Civ.App., 269 S.W.2d 929.

Further, the undisputed facts as hereinbefore set out, most of them admitted by appellant or disclosed by exhibits prepared and signed by appellant, show conclusively that the business was a partnership.

The evidence does not raise issues requiring jury findings as to profits or as to how much appellant was to receive. The company records, kept by appellant or under his supervision, show the material facts beyond dispute. The judgment provides that the partners are to share tangible or physical assets equally. Appellant's share is merely a matter of computation based on the records. Anyway appellant did not request submission of an issue inquiring how much he was to receive, so he cannot complain now that no finding was made. Appelant's tenth point is overruled.

In his first point appellant asserts that the trial court erred in that the judgment seeks to enforce an oral agreement not to be performed within a year, therefore is violative of Art. 3995(5), Vernon's Ann.Civ.St. We do not agree for these reasons:

(1) Appellant and appellee entered into a verbal contract to form a partnership. They did form a partnership--a status created by their performing their agreement. Glasscock v. Price, 92 Tex. 271, 47 S.W. 965, 966. Martin v. Hemphill, Tex.Com.App., 237 S.W. 550; 32 Tex.Jur. 221; 40 Am.Jur. 126-127. Their agreement being thus fully performed, does not come within prohibition of the Statute of Frauds. Palmetto Lumber Co. v. Gibbs, Tex.Civ.App., 52 S.W.2d 120, 128 (Aff. 124 Tex. 615, 80 S.W.2d 742, 102 A.L.R. 474); Shropshire v. Adams, 40 Tex.Civ.App. 339, 89 S.W. 448; Price v. Felumlee, 60 Ohio App. 34, 19 N.E.2d 290; 26 Tex.Jur.2d 264-265; 37 C.J.S. Frauds, Statute of Sec. 238, p. 740.

(2) No time limit was set for the duration of the relationship. Therefore it was terminable at will. That being so it was susceptible of being performed within a year, hence does not come within the Statute of Frauds. Ware v. Chatham, Tex.Civ.App., 56 S.W.2d 229; Hatzfeld v. Walsh, 55 Tex.Civ.App. 573, 120 S.W. 525; Shropshire v. Adams, 40 Tex.Civ.App., 339, 89 S.W. 448; Weatherford, M. W. & N. W. R. Co. v. Wood, 88 Tex. 191, 30 S.W. 859, 28 L.R.A. 526; 26 Tex.Jur.2d 192-195; 49 Am.Jur. 404, 68 C.J.S. Partnership Sec. 61, p. 486.

(3) We think there was sufficient memoranda signed by appellant, the party to be charged, to comply with the Statute of Frauds, Art. 3995(5), V.A.C.S. Among these memoranda are the certificate filed in the Assumed Name Records and the income tax returns for the rears 1956, 1957, 1958 and 1959. These documents, signed by appellant, show that the business arrangement was a partnership. The date of organization, the character of the business, the division of losses and profits (including the change to equal division of profits in 1959) and the ownership of the capital accounts are shown.

In support of the foregoing conclusion we quote from the holding of our Supreme Court in Adams v. Abbott et al., 151 Tex. 601, 254 S.W.2d 78, 80: '* * * A memorandum is required by the statute of frauds, not for the purpose of obtaining a contract in writing, but merely to furnish written evidence, signed by the party to be charged, of the obligation to be enforced against him. Therefore, a valid memorandum of the contract may consist of letters and telegrams signed by the party to be charged and addressed to his agent or the other party to the contract, or even to a third person not connected with the transaction. 49 Am.Jur., Statute of Frauds, Sec. 334; 37 C.J.S., Frauds, Statute of, Sec. 173; Street v. Johnson, Tex.Civ.App., 96 S.W.2d 427.' (Emphasis ours.) See also Rochelle v. Gibler, Tex.Civ.App., 269 S.W.2d 515, and 26 Tex.Jur.2d, 247. Appellant's first point is overruled.

In his second, third, fourth, sixth, eighth and fourteenth points appellant asserts that (2) the judgment is at variance with and (3) does not have support in the pleadings; (4) there is no evidence to support the recovery; (6) the court should not have overruled appellant's motion to disregard the jury's findings; (8) appellant was entitled as a matter of law to at least $63,926.35 before dividing any profits; and (14) the court erred in not permitting appellant to put in evidence his exhibits 74, 74(a) and 74(b), a...